In brief

Political stability will remain in a state of flux and the government is too weak to implement the requisite reforms. However, economic growth will remain positive, albeit from a low level, on the back of added capacity in the diamond sector and the development of the second phase of the Lesotho Highlands Water Project. There remains a high possibility that Lesotho will lose AGOA eligibility which shall take heavy toll on the textile sector and cause severe economic repercussions.